Slide 1: Sasol Limited Financial Results for the six months ended 31 December 2018
SASOL LIMITED FINANCIAL RESULTS for the six months ended 31 December 2018 February 2019
Slide 2: Forward-looking statements
Introduction Forward-looking Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information statements which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to ou
Slide 3: Introduction
INTRODUCTION Bongani Nqwababa and Stephen Cornell February 2019
Slide 4: What you will hear today: Key messages
Key messages What you will hear today Satisfactory set of results in a volatile macro environment LCCP fundamentals remain intact despite increased cost and schedule delays Unrelenting drive towards zero harm and improved operations stability Stellar cost performance underpins our competiveness Incr
Slide 5: Satisfactory set of results in a volatile macro environment
Key messages Satisfactory set of results • Oil price ▲26% to US$71/bbl and US$ exchange rate ▲6% to R14,20 in a volatile • EBITDA ▲10% to R27bn macro FINANCIAL • Core HEPS ▲18% to R21,45 HEPS ▲32% to R23,25 environment RESULTS • Normalised cash fixed costs ▲4,3%, below 6% inflation target • Gearing
Slide 6: LCCP fundamentals remain intact
Key messages LCCP • Overall project 94% complete, construction at 84% and capital expenditure US$10,9bn fundamentals ● Exceptional safety performance continues with RCR of 0,11 ● Utility systems, enabling early production units, reached BO¹ end November 2018 remain intact ● LLDPE reached BO on 13 Fe
Slide 7: Sharpened focus on commissioning and business readiness
Key messages Sharpened • Enhanced focus on key work streams as project transitions to commissioning activities focus on ● Later units to benefit from lessons learnt in construction progress thus far ● Prioritise optimal demobilisation of construction labour to realise efficient cost ramp down commis
Slide 8: Unrelenting drive towards zero harm and operations stability
Key messages Unrelenting Safety performance drive towards ● Safety improvement remains an imperative with two tragic fatalities at our Mining operations zero harm ● Corrective actions implemented on weekend work processes and operations ● Additional focus areas to address high severity incidents and
Slide 9: Stellar cost performance underpins our competitiveness
Key messages Stellar cost • Historical cost base managed to below inflation target despite operational challenges and once-off costs performance ● HY19 normalised cost below 6% inflation target underpins our • FY18 real cost down 5% compared with FY13 competiveness Cost performance (excluding LCCP g
Slide 10: Increasing our focus on sustainability
Key messages Increasing Environmental our focus on ● Committed to transition to a lower carbon footprint sustainability ● Sasol has adopted and started aligning to the TCFD¹ ● Specific focus on our climate change challenges to be included in to ensure 2019 Sustainability Report long-term value ● Sce
Slide 11: Focused on delivering our strategy
Key messages OUR CURRENT PERFORMANCE… WITH CLEAR FOCUS AREAS... LEADS TO Focused on delivering Safety indicators trending positive, Improve our safety performance EBIT our strategy regrettably two fatalities in pursuit of achieving zero harm GROWTH >5% CAGR¹ through the cycle Maintaining our low cos
Slide 12: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Paul Victor February 2019
Slide 13: What you will hear today: Financial and operational performance
Financial and operational performance What you will hear today Stellar cost and improved working capital performance Gearing tight in FY19, investment grade credit ratings remain sacrosanct Continuous balance sheet management through effective hedging execution Successful bond issuance supports driv
Slide 14: Managing macroeconomic volatility
Macroeconomic environment Managing Brent crude oil prices volatility persists Closing rate impacts gearing macro economic $/mmbtu (gas price) volatility US$1 = ZAR $83 R14,20 US$/bbl R13,40 $71 R14,36 $71 $57 R12,37 $3,36 $2,93 HY18 HY19 HY18 HY19 Brent Product price Henry Hub Average rate during pe
Slide 15: Strong earnings performance
Group profitability Strong earnings HY18 HY19 %∆ EBITDA (%) by product Mining 2 864 2 661 7▼ performance 16 Exploration and Production International (EPI) (2 649) 764 >100▲ 37 Energy 5 748 9 565 66▲ Performance Chemicals (PC) 3 889 3 599 7▼ Base Chemicals (BC) 2 541 3 076 21▲ Chemicals 47 Energy Gro
Slide 16: EBIT benefiting from higher rand oil prices
Operating profit EBIT benefiting TAILWINDS from higher rand HY18 11 786 ● Normalised cash fixed costs below oil prices inflation target Exchange rate 18%¹ ● Weaker average exchange rate Macro ● Higher crude oil and product prices Crude oil and environment 43% product prices ● Lower remeasurement ite
Slide 17: Normalised cash fixed cost managed below inflation target
Cash fixed costs Normalised TAILWINDS cash fixed cost HY18 25 053 ● Focused cost management managed below ● Lower unplanned production inflation target US growth (LCCP & Gemini) (5,1%) interruptions during this period ● Continuous Improvement programme Business establishment 0,5%¹ costs & study cost
Slide 18: Mining and EPI: continued focus on improving productivity
Mining and EPI OBUs 18,9 Satisfactory 18,3 2,6 2,6 284 299 MINING operational ● Productivity improved by 8% performance mm tons mm tons R/ton ● Unit cost up 5% due to lower production ● 12% higher export coal price, offset by 6% lower export volumes HY18 HY19 HY18 HY19 HY18 HY19 Production External
Slide 19: Energy SBU
Energy SBU 28,6 29,7 Liquid fuel sales 15,9 14,8 394 400 ENERGY up 4% ● Normalised EBIT up 38% to R10bn mmbbl mmbbl ● number Benefitted from higher rand oil offset by extended SSO shutdown ● Liquid fuels sales increased by 4% due to higher wholesale and HY18 HY19 HY18 HY19 HY18 HY19 commercial sales
Slide 20: Performance and Base Chemicals SBUs
Performance and Base Chemicals SBUs PERFORMANCE CHEMICALS Resilient prices 1 365 1 323 13 13 4 041 ● European and US margins remains strong in rand terms offset by lower 3 721 ● Sales volumes impacted by external volumes kt % ethylene supply force majeure in Europe Rm and extended SSO shutdown ● Rob
Slide 21: Reducing capital expenditure enables deleveraging
Capital expenditure Reducing capital Capital expenditure guidance ● Capital expenditure optimised to prioritise expenditure 80 LCCP enables 70 ● LCCP capital expenditure guidance deleveraging ● US$1,1bn in H1 FY19 60 60 ● US$0,8bn in H2 FY19 53 52 ● Forecast based on R14,10/US$ for FY19 and R13,25/U
Slide 22: Focused balance sheet management
Balance sheet Focused • Access to liquidity of ~US$2bn equivalent – sufficient for LCCP completion balance sheet FINANCIAL • Gearing to peak at 48,9% in FY19, impacted by exchange rates (2%) and LCCP cost and schedule (2%) RISK management MANAGEMENT ● Successful hedging program underpins balance she
Slide 23: A defining FY19: FY19 outlook
FY19 outlook A defining FY19 • Focus on safety and stability of mining operations as productivity increases UPSTREAM • PPA gas production 114-118 bscf PERFORMANCE • Sales volumes (excluding LCCP) 1-2% higher than FY18 CHEMICALS • Start-up of ethoxylation plant in China in second half of FY19 BASE •
Slide 24: Questions and Answers
QUESTIONS AND ANSWERS February 2019